Year in Produce - Amazon and Whole Foods

The first half of 2017, both Amazon Fresh and Whole Foods Market were struggling in a competitive landscape, but in June, that all changed.

Amazon’s purchase of Whole Foods was the biggest story in grocery for many years, and it posed so many questions, most of which still haven’t been answered. Most observers say the deal makes both stronger by accelerating the improvement in their weak areas.

Whole Foods CEO John Mackey said in mid-June, “This partnership’s going to change the world.”

 

Nov. 27 – Whole Foods names exec to help lead integration with Amazon

By Ashley Nickle

Whole Foods Market has promoted Christina Minardi to executive vice president of operations, and she will be among those leading the integration with Amazon.

She will also oversee four regions and work on e-commerce initiatives and other programs, according to a news release. Minardi has been with the company since 1995, most recently serving as president of the northeast region, overseeing 40 stores.

Minardi is the third executive vice president of operations for Whole Foods, joining Ken Meyer and David Lannon.

 

Nov. 20 – Amazon, Whole Foods lower prices — again

By Pamela Riemenschneider

Just in time for the biggest cooking holiday of the year, Amazon and Whole Foods announced fresh price reductions.

Whole Foods’ new reductions are a part of the ongoing integration with Amazon, said CEO John Mackey, “and we’re just getting started.”

“In the few months we’ve been working together, our partnership has proven to be a great fit,” Mackey said in a news release. “We’ll continue to work closely together to ensure we’re consistently surprising and delighting our customers while moving toward our goal of reaching more people with Whole Foods Market’s high-quality, natural and organic food.”

The announcement included a “sneak preview” of “special savings” and in-store benefits for Amazon Prime members, expected when Prime becomes “the official rewards program of Whole Foods Market.”

Prime members get a 50-cent-per-pound discount on turkeys over the already-reduced price.

 

Oct. 9 – Sprouts, Trader Joe’s hit hardest by Whole Foods merger

By Pamela Riemenschneider

A Thasos Group report showed Trader Joe’s and Sprouts Farmers Market gave up 10% and 8% of their regular customer traffic to post-Amazon Whole Foods in the week after the merger.

The analysis covered metrics including customer growth, attribution, loyal customer defection from competitors and customer demographics of customers of Aldi, Costco, Kroger, Publix, Safeway, Sam’s Club, Sprouts, Stop & Shop, Target, Trader Joe’s, Walmart and Whole Foods.

It showed Whole Foods traffic increased 17% year-over-year during the week after the announcement of price reductions.

 

Aug. 28 – Amazon to lower Whole Foods prices

By Ashley Nickle

Lower prices are coming to Whole Foods when its deal with Amazon goes final on Aug. 28.

Starting that date, the retailer will have lower prices on its Whole Trade bananas, organic avocados, organic baby kale and baby lettuce, organic gala and fuji apples and many other items, according to a news release.

“This is just the beginning,” Jeff Wilke, CEO of Amazon Worldwide Consumer, said in the release. “We will make Amazon Prime the customer rewards program at Whole Foods Market and continuously lower prices as we invent together.”

The companies also announced that Whole Foods private-label products will be available through Amazon.com, AmazonFresh, Prime Pantry and Prime Now.

Some locations will get Amazon Lockers, where shoppers can have items shipped for pickup.

The $13.7 billion deal received its de facto stamp of approval from the Federal Trade Commission on Aug. 23.  

 

Aug. 24 – FTC, shareholders approve Amazon/Whole Foods deal ... now what?

By Pamela Riemenschneider

The Federal Trade Commission and shareholders have approved Seattle-based Amazon’s purchase of Whole Foods Market Inc., and the deal is expected to close next week.

Now what?

Amazon reportedly plans to lower prices on grocery staples in Whole Foods stores, and offer Whole Foods products to Amazon Prime members.

But what about fresh produce?

I talked with a National Public Radio affiliate last week about what I expect to happen from a fresh produce perspective.

My bottom line? This is leapfrogging Amazon’s grocery efforts significantly. They’d been stalled out with the Amazon Fresh concept for a while now, but with the purchase of Austin, Texas-based Whole Foods, they’re not just getting 430 potential locations for Amazon Fresh pickup.

They’re getting logistics, distribution and, most importantly, a well-established network of produce buyers. Just look at Lidl. Their produce teams spent YEARS meeting with potential vendors to put together their programs.

This purchase just saved Amazon years of work, building a network and gathering the know-how of all the local, national and international deals that it takes to supply produce nationwide, year-round.

 

July 17 – Amazon had competition for Whole Foods

By Ashley Nickle

Six companies, including two in the grocery industry, expressed interest in Whole Foods before Amazon made its acquisition offer, according to a recent Securities and Exchange Commission filing.

Amazon announced June 16 that it had agreed to buy Whole Foods for $13.7 billion. About two months earlier, facing investor pressure to explore a sale, Whole Foods began hearing from numerous parties. Four private equity firms and two grocery industry companies — none of them named in the filing — expressed interest.

One of the grocery industry companies indicated it wanted to explore a merger-of-equals transaction at a potential value of $35-40 per share. Such a deal would have required “substantial borrowing” and probably would not have been an all-cash transaction.

 

June 26 – Amazon-Whole Foods merger is disruptor, analysts say

By Ashley Nickle

Amazon plans to buy Whole Foods for $13.7 billion, and analysts have described the move as a game-changer for grocery.

Kantar Retail analyst Elley Symmes and Edward Jones analyst Brian Yarbrough called it the biggest disruption in the space since Wal-Mart began opening supercenters.

“I don’t think (Amazon CEO) Jeff Bezos is going into this just saying, ‘You know what, we’re going to buy Whole Foods and just be a natural and organic grocer,’” Yarbrough said. “I think he’s got much bigger plans than that.”

News of the deal came the same week Aldi announced plans to nearly double its U.S. presence and Lidl opened its first U.S. stores.

Bill Bishop, chief architect for retail consulting firm Brick Meets Click, said ensuing price pressure may eventually affect producers along with retailers.

 

June 26  – Whole Foods, Amazon deal to ‘change the world’

By Ashley Nickle

Amazon plans to finalize its $13.7 billion purchase of Whole Foods by the end of the year, and John Mackey has expressed the highest of hopes for the merger.

“This partnership’s going to change the world,” the Whole Foods CEO told employees June 16, according to a Securities and Exchange Commission filing.

“We will be joining a company that’s visionary,” Mackey said in a town hall meeting, the transcript of which was provided in the filing.

Mackey, who will remain CEO after the deal is complete, spoke about what parts of the Whole Foods business will remain and which are expected to change.

A constant will be the company’s quality standards, although Mackey left the door open for Amazon to explore grocery opportunities outside the high-end space. P

 
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